The per diem rates for 2026 are set, and the headline for business travelers is stability. For the period that began October 1, 2025, the IRS kept its high-low per diem amounts unchanged at $319 per day for high-cost localities and $225 per day for everywhere else in the continental United States. If you travel for work, these per diem rates for 2026 decide how much you or your clients can reimburse for lodging, meals, and incidental expenses without tracking every single receipt.
In its list of high-cost and low-cost localities, the IRS kept per diem rates for travel, meals, and incidental expenses unchanged for the new annual period starting October 1.
The figures come from IRS Notice 2025-54, and they line up with the federal travel rates published by the General Services Administration. Holding the rates flat gives small businesses and self-employed travelers a predictable base for planning trips through September 2026.
The 2026 high-low numbers at a glance
The high-low substantiation method splits the country into two buckets. Certain expensive cities and resort areas are designated high-cost, and everywhere else falls into the standard rate. For the 2026 period the amounts are:
- High-cost localities: $319 per day, made up of $233 for lodging and $86 for meals and incidental expenses.
- All other localities: $225 per day, made up of $151 for lodging and $74 for meals and incidental expenses.
- Incidental expenses only: $5 per day for travel where you are claiming incidentals alone.
These are the same amounts as the prior period, so travel budgets built last year should still fit this year.
What per diems are and who uses them
A per diem is a flat daily allowance used to reimburse business travel without collecting a receipt for every meal or taxi ride. Employers like per diems because they simplify recordkeeping and control budgets. Employees and contractors like them because reimbursements are predictable. When an employer pays per diems under an accountable plan and keeps proper documentation of the time, place, and business purpose of the trip, the amounts can be excluded from wages up to the federal limits.
Can the self-employed use per diem rates?
This is the part that trips up a lot of freelancers, so it is worth being precise. If you are self-employed, you can use the federal per diem rate for meals and incidental expenses to figure your deduction. You cannot use the high-low or per diem method for lodging. For your hotel or rental, you must deduct your actual lodging cost based on receipts.
In practice, that means a self-employed consultant on a high-cost trip can deduct the $86 meals-and-incidentals rate per day without itemizing every meal, then deduct the real cost of the room on top of it. Keeping those two categories straight is much easier when your travel expenses flow through a dedicated bookkeeping routine, and when you know which tax forms self-employed professionals use to report the deduction.
How the high-low method works
Each year the IRS publishes the list of high-cost localities along with effective dates for seasonal rates in resort areas. If you use the method, you apply the correct rate based on the traveler’s destination and number of travel days. There are special rules for the first and last days of a trip, which are reimbursed at 75 percent of the meals-and-incidentals rate, and for travel that spans both high-cost and standard localities.
One rule matters for everyone: you must pick a method and stick with it for an employee during the year. Mixing actual expenses and per diems for the same person in the same period invites errors and can complicate an audit.
Why keeping rates flat matters
Steady rates reduce the compliance burden. Expense software, travel policies, and employee manuals built last year still apply, so there is no midyear scramble to update payroll codes. For sectors with heavy travel, such as consulting, construction, field services, and sales, that stability is welcome.
The trade-off shows up in cities where hotel and food prices have climbed faster than the national average. In those markets, the flat allowance can fall short of real costs, and travelers may need to seek an exception or absorb the difference. Some businesses adopt a hybrid approach, using IRS per diems in most markets while allowing capped exceptions in a handful of expensive cities.
Recordkeeping that protects your deduction
Even with per diems, documentation is the constant. Whether you reimburse staff or deduct your own travel, keep records of the business purpose, the dates, and the destination of each trip. The per diem method removes the need for meal receipts, but it does not remove the need to prove the trip was real and business related.
- Log the dates and destination for every business trip.
- Note the business purpose for each day of travel.
- Keep lodging receipts, since self-employed travelers cannot use a per diem for rooms.
- Apply the 75 percent rule for first and last travel days.
The bottom line for the per diem rates for 2026 is predictability. The amounts held steady, the method did not change, and self-employed travelers gain a clear starting point for planning deductions through the rest of the period. As always, local price swings may still require case-by-case judgment, especially in the priciest markets.
Frequently asked questions
What are the IRS per diem rates for 2026?
For the period beginning October 1, 2025, the high-low rates are $319 per day for high-cost localities and $225 per day for all other localities in the continental United States. The meals-and-incidentals portion is $86 and $74 respectively, and the incidentals-only rate is $5 per day.
Can a self-employed person use the per diem method?
Self-employed individuals can use the federal per diem rate for meals and incidental expenses, but not for lodging. Lodging must be deducted at actual cost using receipts.
Did per diem rates go up for 2026?
No. The IRS kept the high-low per diem rates unchanged from the prior period, so the high-cost and low-cost amounts are the same as before.
How are the first and last days of travel reimbursed?
The meals-and-incidental-expenses portion of the per diem is limited to 75 percent of the daily rate on the first and last days of a trip.
Are per diem reimbursements taxable?
Per diems paid under an accountable plan with proper documentation are generally not taxable up to the federal rates. Amounts paid above the federal limits, or without the required records, can be treated as taxable wages.
Where does the IRS publish the high-cost locality list?
The IRS releases the high-cost locality list and rates in an annual notice, most recently Notice 2025-54, and the underlying federal travel rates are published by the General Services Administration.
